Toisa, Hyundai ink $42.5 million settlement of vessel delivery dispute

By Caroline Salls

Pittsburgh, Dec. 5 – Toisa Ltd. requested court approval of a shipbuilding dispute settlement reached with Hyundai Heavy Industries Co., Ltd., according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

Toisa said it, as buyer, entered into a $150 million contract on Jan. 31, 2013 with Hyundai, as builder, for the construction of an offshore vessel.

On April 28, 2016, Toisa notified Hyundai that it could legally cancel the contract in accordance with a provision that gave it the right to do so in a case of “excessive delay of the delivery of the vessel” after the passing of 210 days after the contracted delivery date.

Hyundai subsequently said Toisa’s notice of cancellation was illegal. Hyundai began arbitral proceedings in London on May 10, 2016 and filed claims against Toisa on Aug. 1, 2016, alleging that the contract was wrongfully cancelled and that Toisa breached the contract by refusing to take delivery of the vessel.

Hyundai also said it had obtained an extension of the delivery longstop date.

Toisa said it filed a counterclaim, alleging it was owed $67.5 million, “together with interest and other costs that collectively approach approximately $90 million in refund costs.”

Under the proposed settlement, Hyundai will pay Toisa $42.5 million.

The settlement will be presented to the court for approval on Dec. 22.

Toisa is a Hamilton, Bermuda-based shipping business. The company filed bankruptcy on Jan. 29, 2017 under Chapter 11 case number 17-10184.

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